Annuities

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The following article is from The Great Soviet Encyclopedia (1979). It might be outdated or ideologically biased.

Annuities

 

a form of state loan by which the creditor periodically receives a certain income (rente), established on the basis of a gradual liquidation of the capital sum and interest on the debt. There are fixed-term and life annuities. In the case of the former, the payment of income is limited in time (usually the period is quite long) and may be transferred to another individual. In the case of lifetime annuities, income may be received only by the immediate creditor, and the payment of rente ceases with the death of the holder. The price of annuities derives from the market level of loan interest rates. The size of the annual payment on lifetime annuities is determined in accordance with the age of the creditor and statistical data on the mortality of the population. In Britain and France annuities were issued in the early 19th century in order to speed up the liquidation of termless loans, the latter being exchanged for fixed-term or lifetime loans. In non-European countries annuities spread in the 17th and 18th centuries: in the USA they were issued during the consolidation of the state debt, which arose during the War for Independence (1775–83).

The Great Soviet Encyclopedia, 3rd Edition (1970-1979). © 2010 The Gale Group, Inc. All rights reserved.
References in periodicals archive ?
Similarly, if he elects to annuitize a variable deferred annuity on a fixed annuity payout arrangement, and if the total value of theaccumulation unitsin his contract, at the time of annuitization, is $100,000, he will receive that same income, assuming the same annuity payout factor.
Walsh says many participants annuitize only enough assets to pay for their core living expenses, and they let the rest of their savings continue to accumulate.
By comparison, the person who annuitizes and invests the difference has the entire "difference" to liquidate without at all threatening his lifetime guarantee of $1,000 a month.
Aside from theoretical interest in the question of who annuitizes and why, annuitization has become an increasingly visible issue within retirement policy circles.
The GMIB guarantees what the minimum amount of monthly income will be, once the policyholder annuitizes the contract.